Police & Fire Pension

POLICE & FIRE PENSION BOARD MEETING DATE: APRIL 20, 2023 CITY HALL, ROOM 302A TIME: 1:00 P.M. Present: Stan Chubinski, Ed Guzzo, Tammy Giannunzio, Jake Martin, and Chris Rabbitt. Also Present: Lily Vardell (Police & Fire Pension Administrator), Jeremy Tollas (CAPTRUST), and Michelle Hull (Human Resources Director.) Chair Chubinski asked for approval of the agenda. Motion Martin, seconded by Giannunzio. On a voice vote, motion carried. Presented minutes of the regular meeting from March 20, 2023. Motion Guzzo, seconded by Martin to approve the regular meeting minutes from March 20, 2023. On a voice vote, motion carried. Bank Summary of Assets & Expense Report: As of 3/31/2023, the market value of the portfolio was $162,066,106.41 a gain of $2,739,028.68 from the 2/28/2023 balance. For the month of March, the following expenses were deducted: Expense Type Payee Amount Frequency Additional Details Actuarial Services Fee Gabriel Roeder Smith & Co. 19,800.00 Annually 2022 Actuarial Valuation Administrative Fee City of Battle Creek 3,050.00 Quarterly 1/1/23-3/31/23 Total Admin. Fees 22,850.00 Motion Giannunzio, seconded by Guzzo to accept the financial reports and quarterly bank summaries submitted for March. On a voice vote, motion carried. Board Reports Chubinski - none Giannunzio – none Guzzo - none Martin – none Rabbitt - none Vardell  Three new Firefighters hired on 4/17/23: o Corey Teinert o Connor Brecker o Austin Brophy Page 1 of 4   Changes to FAC for 5 DROP participants. This change was due to their original FAC not including accrued vacation time: o LaMarr Mingle – no change to pension benefit, still at max-out amount. o Jeannell Justin – no change to pension benefit, still at max-out amount. o Wayne Thompson – monthly increase of $44.70. o Edward Marshall – monthly increase of $3.81. o John Hausman – monthly increase of $92.23. New Business  Policy Review – Re-employment of a Retiree Policy: o Comment from Vardell - In the final ‘Resolved’ section of the Policy, we need to correct ‘City of Battle Creek City Council’, to ‘Battle Creek City Commission.’ o Need to review the BCPD Proposal below before accepting any policy changes.  Rabbitt presented the BCPD Proposal on Re-employment of a Retiree: o BCPD is requesting a modification to the Board’s current Re-employment of a Retiree Policy. o BCPD provides contractual services to Bronson Battle Creek. There is a struggle to fill the four positions. Currently, only two positions are filled and the least-senior officers are forced to fill the positions on a six-month rotation. o BCPD would like to re-hire BCPD retirees to fill the Bronson positions. o The current Board policy requires a retiree to suspend their benefit payments if they are re-employed by BCPD. o BCPD is requesting that, instead of suspending the retiree’s benefit payments, we hold the retiree’s monthly benefit payments in a separate account, similar to the DROP, and make a lump-sum payment to the retiree from their DROP account once they leave the Bronson position. o The Board could determine the amount of interest to be paid to the retiree on their DROP account contributions, from zero to 2%. o Comment from Hull – HR has had talks with the POLC Non-Supervisory Union Group and they are having a hard time recruiting for positions in general. We have recently retired individuals who would be interested in filling the Bronson positions. o Question from Martin – Can a retiree go work as security for Bronson instead of being re-hired by the City?  Answer from Rabbitt – They would not be a sworn officer, and that is what Bronson is requesting. o Question from Guzzo – Does Bronson currently pay for these officers? Page 2 of 4   Answer from Hull – Yes, the hospital is under contract with BCPD and pays for the officers. o Comment from Hull – Act 345 and the Board’s policy state that if a retiree is re- hired into the Police & Fire Pension Benefit Group, their current monthly pension benefits will be suspended until they terminate employment. This proposal is asking to instead have the retiree’s benefit put into a separate account each month, and then paid out as a lump-sum once they terminate employment. If the retiree is re-hired, they will still have to contribute to the Police & Fire Pension Fund each paycheck, like all other P&F employees. What would happen to this new contribution? o Answer from Vardell – If this proposal were to work like the DROP, these new contributions would remain in the Police & Fire Pension Fund and would not be paid out to the retiree upon termination. o Comment from Rabbitt – The idea is that this would be a form of DROP for the POLC Non-Supervisory Group, who currently do not have a DROP. o Comment from Chubinski - This proposal would also need to be run by the Board’s Attorney for an opinion. o Comment from Martin – There could be an actuarial cost to this as well, so we would need to determine what that would be before agreeing to this proposal. o Question from Guzzo – What would other costs be to the Pension System due to this proposal?  Answer from Martin – If this proposal did not mirror the DROP, the retirees would have the ability to withdraw all additional contributions made to the Pension Fund upon terminating. Tabled for further discussion - Updating the Re-employment of a Retiree Policy, and a decision on the BCPD proposed amendment to the Policy has been tabled until the Board receives more information from BCPD and the Board’s Attorney.  CAPTRUST: Tollas provided a March investment update: o March ended up being a fairly positive month. U.S. Large-Cap Stocks up 3.67%. o U.S. Small-Cap Stocks were down 4.78%. This decrease was due to the recent bank failures. Investors we less interested in investing in regional banks because of the failures. o Bonds were up 2.54% for March. o Year-to-date, U.S. Large-Cap Stocks are up 7.50%, Small-Cap Stocks are up 2.74%, and Bonds are up 2.96%. Page 3 of 4  o As of April 14th, the Market Value of the portfolio was $164,264,337, a slight increase from the balance at the end of March. Public Comment - none Next regular meeting: Monday, May 15th at 1:30 PM Meeting adjourned at 1:45pm Respectfully submitted, Lily Vardell, Recording Secretary __________________________________ __________________________________ Board Member signature Board Member signature Page 4 of 4